Investing in a seasonal franchise can be a good opportunity for entrepreneurs looking to enter the business world. Seasonal franchises operate for a specific period of time during the year, catering to the demands of customers during peak seasons. These franchises are often associated with industries such as tourism, retail, and hospitality. While they may not generate year-round income, seasonal franchises can still be profitable if managed effectively. By capitalizing on the high-demand periods and implementing strategic marketing and operational plans, seasonal franchise owners can maximize their profits and minimize their expenses. Additionally, seasonal franchises offer flexibility and the opportunity to explore other ventures during the off-season, making them an appealing investment choice for many.
What Is A Seasonal Franchises?
Examples of seasonal franchises include mosquito-fighting franchises that tend to start in the spring and go to the fall or tax services that are most active during the upcoming tax season. Seasonal franchises do tend to pick up the bulk of their revenue during specific months. For example, a pool service franchise would be busier during the summer, when more pools are being used, than during the winter, when pools typically go into maintenance mode. Some people are drawn to the allure of working with a franchise that is only active during a finite period each year, but there are some things to consider before investing in this model.
Personnel
Hiring is a huge part of franchise ownership. You must have a team of employees, or you will have to work in your franchise more than you might like. Likewise, you might not be able to grow as quickly without the staff needed to fulfill the orders.
With a seasonal franchise, hiring issues can be more challenging. Knowing the type of employees you need to hire can help navigate the feast or famine cycle from an HR perspective. For example, if you hire many college students to teach swim lessons, you’ll probably have enough people in your hometown looking for seasonal work to have a teacher in each class. On the other hand, if you own a tax franchise, it can often prove difficult to hire qualified employees for a finite period in such a specific niche.
Work with your franchisor as a way to understand how to navigate the job market and find the right people to fit those temporary roles.
External Factors
Even a seasonal business is not guaranteed to be in full operation mode for a specific season. Factors that contribute to whether or not the services are needed or rendered during that period may be mild summer temperatures — this could decrease the number of mosquitos, making it harder for a mosquito-fighting company to drum up business.
It is important to insulate your business and franchise by having backup plans, contingency plans, or a diversified offer during uncertain months. Before you sign up with the franchisor, discuss with them how they navigate the ebbs and flows of seasonal demand.
Long-Term Budgeting
This probably doesn’t need to be said, nonetheless, seasonal businesses will have months with more and less cash flow. These businesses must have budgeting practices in place as well as longer-term planning.
When deciding if the franchise is right for you to invest in, talk to the franchisor about how these ups and downs are handled from a budget standpoint. In order to make the opportunity less risky, they should have a solid system in place that is backed by years of experience. However, without a plan, that franchise should be carefully considered and analyzed during the first year, so you don’t make costly mistakes.
If you’re looking to invest in a seasonal franchise, make sure to discuss all three areas with your franchisor— support in hiring enough personnel for the busy season, contingency plans for external factors impeding sales, as well as long-term budgeting systems to stay in the black year-round.
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About Aaron Bakken
Franchise Consultant for The Franchise Consulting Company
Proven Experience
Aaron has 20+ years of franchise and independent business ownership experience. He also spent 5 years as the VP of Franchise Development for an international franchise group, growing the franchise to the advent of a private equity buyout. Whether you are looking to buy a franchise opportunity or franchise your business, Aaron knows how to guide you.
No Cost To You
Aaron is paid by franchisors and development companies for bringing them viable franchise investors. So frankly, his clients have nothing to lose by engaging with him but a bit of their time. Aaron helps his clients navigate the complex world of franchise ownership and development and provides long term guidance to help his clients achieve their entrepreneurship goals.